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Constantinos Parissis - UMIST MBS - MScThesis

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Enforcing EU Employment Law in the UK
The Pending Directives on Individual Labour Law
and the Consequences of their Forthc...
DECLARATION
No portion of the work referred to in this thesis has been submitted in support of an
application for another ...
ACKNOWLEDGEMENTS
I would like to express my gratitude to Professor Jill Rubery, who supervised this study,
for her support...
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Constantinos Parissis - UMIST MBS - MScThesis

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C Parissis - Manchester Business School (MSc in International Business) Thesis: "Enforcing EU Employment Law in the UK: The Pending Directives on Individual Labour Law and the Consequences of their Forthcoming Implementation". The study had two objectives: firstly, to interpret the pending in the UK (in 1999) European Directives on Individual Labour Law; and, secondly, to assess the impact of their forthcoming implementation on the employees and business in the UK. The Directives examined are those on the Burden of Proof in Cases of Discrimination Based on Sex, Parental Leave, Part-time Work, Fixed-term Work and on the Posting of Workers.

C Parissis - Manchester Business School (MSc in International Business) Thesis: "Enforcing EU Employment Law in the UK: The Pending Directives on Individual Labour Law and the Consequences of their Forthcoming Implementation". The study had two objectives: firstly, to interpret the pending in the UK (in 1999) European Directives on Individual Labour Law; and, secondly, to assess the impact of their forthcoming implementation on the employees and business in the UK. The Directives examined are those on the Burden of Proof in Cases of Discrimination Based on Sex, Parental Leave, Part-time Work, Fixed-term Work and on the Posting of Workers.

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Constantinos Parissis - UMIST MBS - MScThesis

  1. 1. Enforcing EU Employment Law in the UK The Pending Directives on Individual Labour Law and the Consequences of their Forthcoming Implementation A Thesis submitted to the THE UNIVERSITY OF MANCHESTER INSTITUTE OF SCIENCE AND TECHNOLOGY for the Degree of Master of Science in International Business by Constantinos Parissis Manchester School of Management The University of Manchester Institute of Science and Technology September 1999
  2. 2. DECLARATION No portion of the work referred to in this thesis has been submitted in support of an application for another degree or qualification of this or any other university or other institute of learning.
  3. 3. ACKNOWLEDGEMENTS I would like to express my gratitude to Professor Jill Rubery, who supervised this study, for her support, guidance and understanding. Special thanks are given to Brian Bercusson, Professor of European Law in the University of Manchester, for his invaluable suggestions, although he was carrying no obligation to help. I would like to thank Dr. Dave Murphy and Dr. Jiens Peter Reinhardt from the Manchester School of Management for their precious advice and encouragement. I would also like to thank Ioannis Manoledakis, Professor of Penal Law in the Aristotle University of Thessaloniki, for his highly influential teaching that made me think as a legal scientist, as well as C. Hadjiconstantinou, Professor of International Law and L. Kotsiris, Professor of Company Law in the same University, for recommending me to UMIST. Finally, I would like to express my deepest love and gratefulness to my parents who once again supported me with any possible means in fulfilling my dreams. Στην Ειρήνη µας
  4. 4. 7 ABSTRACT This study has two objectives: firstly, to interpret the pending in the UK Directives on Individual Labour Law; and, secondly, to assess the impact of their forthcoming implementation on the employees and business in the UK. The Directives examined are those on the Burden of Proof in Cases of Discrimination Based on Sex, Parental Leave, Part-time Work, Fixed-term Work and on the Posting of Workers. The first two Chapters constitute the literature review. Chapter 1 refers to the legislative background and briefly covers the evolution of labour law in Western Europe, the (E)EC and the UK, the institutional framework of the European Union, the main sources of EU Labour Law, the legislative process in the EU and the hierarchy between Union and national laws. Chapter 2 includes an overview of the most important of the existing analyses reviewed, and a summary of the current legislation in the UK. Chapters 3-6 constitute the legal interpretation of the Directives: Chapter 4 covers both of the Directives on ‘atypical work’ (part-time and fixed-term work), while each one of the other chapters concern each one of the rest of the Directives. This part of the study reveals several issues of legal and practical importance, as the Directives’ major weaknesses and limitations, as well as potential problems related with their implementation. In Chapter 7 we attempt to assess the most important direct and indirect effects of the regulations on the employers, the workers and the employment conditions. The final part (Conclusions) provides a synopsis of the most important points of the analysis, associating the findings of the legal interpretation (from ch. 3-6) with the findings on their impact (from ch. 7). The law is as stated at 1 September 1999.
  5. 5. 9 Table of Contents ABSTRACT ..................................................................................................................... 7 TABLE OF CONTENTS ................................................................................................. 9 LIST OF ABBREVIATIONS ........................................................................................ 15 INTRODUCTION ........................................................................................................ 17 I. AIM OF THE RESEARCH .........................................................................................17 II. ACADEMIC RELEVANCE.......................................................................................17 III. SCOPE OF THE RESEARCH...................................................................................18 III. a. Directives to be Examined......................................................................................................18 III. b. Directives Excluded...............................................................................................................19 IV. RESEARCH METHODOLOGY...............................................................................20 IV. a. Legal analysis.......................................................................................................................21 IV. b. Socio-economic analysis........................................................................................................23 V. STRUCTURE ...........................................................................................................23 REFERENCES ..............................................................................................................24 CHAPTER 1 LITERATURE REVIEW, PART I: PRESENTATION OF THE CONTEXT...... 25 A. THE LEGISLATIVE BACKGROUND .....................................................................26 A.1 The Evolution of Labour Law in Western Europe...................................................26 A.2 The Evolution of European Labour Law within the EEC ........................................27 A.2.a 1957-1973: The Market Approach of Labour Issues..................................................................28 A.2.b 1974-1980: The ‘Golden Era’ of European Labour Law ...........................................................29 A.2.c 1981-1991: The Interaction between UK Politics and EEC Social Concerns...............................29 A.2.d The Developments in Maastricht.............................................................................................30 A.2.e The Treaty of Amsterdam........................................................................................................30 A.2.f An Overview: European Social Policy......................................................................................31 A.3 The Evolution of British Labour Law....................................................................31 A.3.a Collective Laissez-faire..........................................................................................................32 A.3.b Deregulation and the “End of Trade-unionism”.......................................................................32 A.3.c The role of Common Law .......................................................................................................33
  6. 6. 10 A.3.d The British Labour Law in the Context of the EEC....................................................................33 A.4 The Interaction Between the UK and the (E)EC Labour Law ..................................34 A.5 Transposition of (E)EC Labour Law into Domestic UK Law ..................................35 B. THE EU INSTITUTIONAL FRAMEWORK ..............................................................35 B.1 The Basic Institutions ...........................................................................................36 B.1.a The European Parliament (EP)...............................................................................................36 B.1.b The Council ..........................................................................................................................36 B.1.c The Commission....................................................................................................................38 B.1.d The European Court of Justice................................................................................................39 B.2 The ‘Social Partners’............................................................................................40 C. THE MAIN SOURCES OF EU LABOUR LAW.........................................................40 C.1 Primary Sources of EU Labour Law: The Treaties..................................................41 C.2 The Directives as a Source of EU Labour Law.......................................................41 C.2.a Common Principles Across the Employment Related Directives.................................................43 C.3 Other Secondary Sources......................................................................................44 C.3.a Regulations...........................................................................................................................44 C.3.b Decisions..............................................................................................................................44 D. HIERARCHY BETWEEN EU AND NATIONAL LAW.............................................45 D.1 The Question of Supremacy of EU Law ................................................................45 D.2 Applicability and Effect of EU Law ......................................................................46 D.2.a Direct Effect.........................................................................................................................46 D.2.b Indirect Effect.......................................................................................................................47 E. THE LEGISLATIVE PROCESS ON LABOUR ISSUES IN THE EUROPEAN UNION48 REFERENCES ..............................................................................................................50 CHAPTER 2 LITERATURE REVIEW, PART II: THE PENDING DIRECTIVES ................... 51 A. PROBLEMS OF THE REVIEW.................................................................................52 B. EXISTING ANALYSES REVIEWED........................................................................53 B.1 An Overview .......................................................................................................53 B.1.a Catherine Barnard (1996): EC Employment Law .....................................................................54 B.1.b Catherine Barnard and Tamara Hervey (1998): European Union Employment and Social Policy Survey 1996 and 1997............................................................................................................54 B.1.c Brian Bercusson (1996) European Labour Law........................................................................54 B.1.d Roger Blanpain and Chris Engels (1998): European Labour Law - and – Roger Blanpain and Ioannis Koukiadis (1993): Community Law of Employment: before and after Maastricht.............55 B.1.e Mark Jeffrey (1998): Not Really Going to Work? Of the Directive on Part-time Work, ‘Atypical Work’ and Attempts to Regulate it...........................................................................................56
  7. 7. 11 B.2. Burden of Proof in Cases of Discrimination Based on Sex .....................................56 B.3 Parental Leave .....................................................................................................56 B.4 Atypical Work .....................................................................................................57 B.5 The Posting of Workers ........................................................................................59 C. THE DIRECTIVES FROM THE SCOPE OF BRITISH LABOUR LAW......................59 C.1 Burden of Proof in Cases of Discrimination Based on Sex ......................................60 C.2 Parental Leave .....................................................................................................61 C.3 Atypical Work .....................................................................................................62 C.3.a Part-time Work .....................................................................................................................63 C.3.b Fixed-term Work ...................................................................................................................66 C.4 The Posting of Workers ........................................................................................69 C.5 Concluding Remarks ............................................................................................70 REFERENCES ..............................................................................................................72 CHAPTER 3 THE BURDEN OF PROOF IN CASES OF SEX DISCRIMINATION ................. 75 A. GENERAL INFORMATION .....................................................................................76 B. CONTENT OF THE DIRECTIVE..............................................................................78 B.1 Definitions...........................................................................................................78 B.1.a Principle of Equal Treatment..................................................................................................78 B.1.b Indirect Discrimination..........................................................................................................78 B.2 Purpose and Manifestation....................................................................................80 B.2.a The Burden of Proof ..............................................................................................................81 B.2.b Information...........................................................................................................................81 B.3 Scope..................................................................................................................82 B.4 Other Provisions ..................................................................................................83 C. IMPLEMENTATION IN THE UK.............................................................................83 REFERENCES ..............................................................................................................87 CHAPTER 4 PARENTAL LEAVE ................................................................................................... 89 A. GENERAL INFORMATION .....................................................................................90 B. CONTENT OF THE DIRECTIVE..............................................................................91 B.1 Purpose, Manifestation and Function.....................................................................91 B.1.a The Right to Parental Leave ...................................................................................................92
  8. 8. 12 B.1.b The Entitlement to Time Off on Grounds of Force Majeure........................................................94 B.2 Scope..................................................................................................................95 B.2.a Limitations Regarding Parental Leave.....................................................................................95 B.2.b Limitations Regarding Time Off..............................................................................................96 B.3 Other Provisions ..................................................................................................97 C. IMPLEMENTATION IN THE UK.............................................................................98 C.1 Parental Leave .....................................................................................................99 C.2 Time Off from Work ..........................................................................................100 REFERENCES ............................................................................................................102 CHAPTER 5 ATYPICAL WORK ................................................................................................... 103 A. GENERAL INFORMATION ...................................................................................104 A.1 Definitions ........................................................................................................106 A.1.a Atypical Work .....................................................................................................................106 A.1.b Part-time Work....................................................................................................................107 A.1.c Fixed-term Work..................................................................................................................108 A.1.d Temporary Work .................................................................................................................108 A.1.e The ‘Comparative Employee’................................................................................................108 B. THE DIRECTIVE ON PART-TIME WORK.............................................................109 B.1 Purpose and Manifestation..................................................................................109 B.1.a The Removal of Discrimination.............................................................................................110 B.1.b The Improvement of the Quality of Part-time Work.................................................................111 B.1.c Facilitating the Development of Part-time Work on a Voluntary Basis......................................112 B.1.d Contributing to the Flexible Organisation of Working Time (…)..............................................114 B.2 Function and Scope............................................................................................114 B.2.a The General Principles and Minimum Requirements...............................................................114 B.2.b Other Functions ..................................................................................................................116 B.3 Other Provisions ................................................................................................116 C. THE DIRECTIVE ON FIXED-TERM WORK..........................................................117 C.1 Purpose and manifestation ..................................................................................117 C.1.a The Application of the Principle of non-discrimination ...........................................................118 C.1.b The Improvement of the Quality of Fixed-term Work...............................................................119 C.1.c The Establishment of a Framework to Prevent Abuse..............................................................120 C.2 Scope................................................................................................................121 C.3 Other Provisions ................................................................................................122 D. IMPLEMENTATION IN THE UK...........................................................................122
  9. 9. 13 D.1 Part-time Work ..................................................................................................122 D.2 Fixed-term Work ...............................................................................................124 REFERENCES ............................................................................................................125 CHAPTER 6 POSTED WORKERS ................................................................................................ 127 A. GENERAL INFORMATION ...................................................................................128 B. CONTENT OF THE DIRECTIVE............................................................................130 B.1 Definitions.........................................................................................................130 B.1.a Social Dumping...................................................................................................................130 B.1.b Home and Host State ...........................................................................................................130 B.1.c Worker................................................................................................................................131 B.1.d Posted Worker.....................................................................................................................131 B.1.e ‘Minimum Rates of Pay’.......................................................................................................132 B.1.f ‘Non-significant Work’ .........................................................................................................132 B.1.g ‘Universally Applicable Collective Agreements or Arbitration Awards’....................................132 B.1.h Equality of Treatment...........................................................................................................132 B.2 Scope................................................................................................................133 B.2.a General Applicability...........................................................................................................133 B.2.b Exemptions and Derogations................................................................................................134 B.3 The Basic Principle and the Key Provisions .........................................................135 B.3.a The Basic Principle..............................................................................................................136 B.3.b The General Level of Protection............................................................................................136 B.3.c Sources of Applicable Regulations.........................................................................................137 B.4 Function............................................................................................................138 B.5 Other Provisions ................................................................................................140 C. IMPLEMENTATION IN THE UK...........................................................................142 REFERENCES ............................................................................................................143 CHAPTER 7 IMPACT ASSESSMENT........................................................................................... 145 A. THE METHODOLOGICAL APPROACH................................................................146 B. THE DIRECTIVE ON THE BURDEN OF PROOF...................................................148 C. THE PARENTAL LEAVE DIRECTIVE...................................................................150 Note on the Governmental Resources.............................................................................................150 C.1. Parental Leave ..................................................................................................151
  10. 10. 14 C.1.a Direct Impact on the Employees............................................................................................151 C.1.b The Gender Impact..............................................................................................................153 C.1.c The Impact on Business........................................................................................................156 C.1.d Impact on Employment Conditions........................................................................................157 C.2 Time off ............................................................................................................158 D. THE DIRECTIVES ON ATYPICAL WORK............................................................159 D.1 The Directive on Part-time Work ........................................................................159 D.1.a Scope.................................................................................................................................159 D.1.b Governmental Estimations...................................................................................................159 D.1.c The General Level of Protection ...........................................................................................162 D.1.d The Trojan Effects of Clause 6(2)a........................................................................................168 D.2 The Directive on Fixed-term Work......................................................................169 E. THE POSTED WORKERS DIRECTIVE ..................................................................171 REFERENCES ............................................................................................................173 CONCLUSIONS......................................................................................................... 175 SELECTED BIBLIOGRAPHY ................................................................................... 181 INTERNET RESOURCES........................................................................................... 187 APPENDIX I SELECTED ARTICLES OF THE EC TREATY............................................................189 APPENDIX II THE PENDING DIRECTIVES.....................................................................................195 APPENDIX III SELECTED RULINGS OF THE COURT OF JUSTICE ................................................239 Note on the numbering of the Articles of the EC Treaty: unless explicitly stated, the numbering is as it appears in the Treaty of Rome and its following amendments, until Maastricht. Thus, the numbers of the Articles do not correspond to the numbers of the consolidated texts of the EC Treaties.
  11. 11. 15 List of Abbreviations CEEP European Centre of Enterprises with Public Participation EC European Community ECJ European Court of Justice ECSC European Coal and Steel Community EEC European Economic Community EP European Parliament ETUC European Trade Unions Confederation EU European Union IRS Industrial Relations Services IRSET Industrial Relations Services – Employment Trends SPA Social Policy Agreement TEU Treaty on the European Union UNICE Union of Industrial and Employers’ Confederations of Europe TU(PE) Transfer of Undertakings (Protection of Employees) (Act) EqPA Equal Pay Act LIFO Last In First Out ERA Employment Relations Act TULR(C)A Trade Union and Labour Relations Consolidation Act CAC Central Arbitration Committee EAT Employment Appeal Tribunal SDA Sex Discrimination Act RRA Race Relations Act RIA Regulatory Impact Assessment DTI Department of Trade and Industry
  12. 12. 17 INTRODUCTION I. Aim of the Research The primary purpose of this research is to interpret the new, to the UK, regulations on Individual Labour Law emanating from European Union Directives. However, instead of introducing a strictly legal document expanding the legal discussion over the new legislation, we will attempt to examine the regulations in the context of their foreseen implementation and to assess their impact, primarily on the parties concerned (management and labour), as well as on the employment relations in general. II. Academic Relevance The UK’s labour market being the least regulated in Europe and the present number of European Union proposals on employment issues being rather large, keeping up to date with legislation emanating from Europe is likely to become increasingly important for UK employers over the forthcoming years (IRSET 671, p. 6), after the Labour Government’s opt-in to the European Social Chapter (similarly IRSET 679, p. 16). Moreover, the volume of new regulations on employment issues is increased by Britain’s peculiar position in the EEC and its successor the EU: for eighteen years (1979-1997) the Conservative Administration followed a policy which, before 1989, blocked the adoption of almost all employment legislation at European level and, between 1989 and 1997, suspended the harmonisation of UK law to most of the
  13. 13. Introduction 18 European employment legislation, which must now be embodied in the national law. This legislation, as a whole, touches virtually all known aspects of the employment relationship and establishes individual employment rights, which to a great extent are novel for the UK as mandatory regulations. Hence, the scrutiny of the forthcoming legislation may be characterised as essential, not only for the employers but also for the employees, and the examination of its prospective impact in the UK seems a high priority. III. Scope of the Research This study is concerned with the employment legislation emanating from Directives, since this form of Community action is the main instrument of implementing law unification policies1 across the EU (Morris, P.E., 1989, pp. 242-243). More specifically, it is focused on the Directives the implementation of which is pending in the UK, either because they are novel as regulations or their implementation was postponed by the previous Governments. III. a. Directives to be Examined During the summer and at the final stage of the research, two of the Directives which were from the beginning intended to be part of it, the Directive on Parental Leave and the Directive on Part-time Work, came into implementation by the new Employment Relations Act (27/7/99). However, the Directives are at least partially pending and, since their examination was deemed as compliant with the general purposes of this study, their analysis was included in the final text. Moreover, on June 1 The importance of the Directives is such that Coopers and Lybrand Consulting, in an informative brochure of 1988, was suggesting to its clients, in certain instances, even to rearrange their company or group structure in anticipation of the requirements of forthcoming Directives, or to lobby for changes to draft directives (Coopers and Lybrand, 1980).
  14. 14. Introduction 19 28 the Council adopted as a Directive the Framework Agreement on fixed-term work, which was concluded by the Social Partners earlier this year (18/3/99). The text of the Directive was published in the Official Journal on July 10 and became publicly available on July 26. This Directive was also included. Thus, the Directives which shall be examined are: 1. Directive 97/80/EC of 15 December 1997 on the burden of proof in cases of discrimination based on sex (to be implemented in the UK by 13/7/2001). 2. Directive 96/34/EC of 3 July 1996 concerning the framework agreement on parental leave, concluded by ETUC, UNICE and CEEP (to be fully implemented in the UK by 15/12/1999). 3. Directive 97/81/EC of 15 December 1997 on part-time work (to be fully implemented in the UK by 7/4/2000). 4. Directive 99/70/EC of 28 June 1999 concerning the framework agreement on fixed term work, concluded by ETUC, UNICE and CEEP (to be implemented in the UK by 10/7/2001). 5. Directive 96/71/EC of 16 December 1996 on issues related to posting of workers (to be implemented in the UK by 24/9/1999). III. b. Directives Excluded The Directives which, although – at least partly – pending, have not been deemed as compliant with the aims of this study, are: 1. Directive 98/59/EC of 20 July 1998 on collective redundancies. The reason for excluding this Directive is that it does no more than consolidate the texts of Directive 75/129/EEC of 17 February 1975 and its following amendment, Directive 92/56/EEC of 24 June 1992, both implemented in the UK. 2. Directive 94/33/EC of 22 June 1994 on the protection of young people at work. The Directive has been excluded because all of its important parts have already been implemented (i.e. the Health and safety - Young Persons - Regulations of 1997
  15. 15. Introduction 20 implemented articles 6 and 7 of the Directive, and the Children - Protection at Work - Regulations of 1998 implemented article 4, as well as all other provisions related to the employment of children). 3. Directive 98/50/EC of 29 June 1998, amending the Directive 77/187/EEC of 14/2/1977 on the protection of employees in cases of transfer of undertakings, implemented in the UK with the Transfer of Undertakings (Protection of Employees) (‘TU(PE)’) Act of 1977. The new Directive incorporates in the text of the regulation the most important rulings of the European Court of Justice on the issues it concerns, brings the amended provisions into line with the (above- mentioned) Directive on collective redundancies and, in general, resolves several problematic points of the amended text. Hence, although very important, it can be considered more as an improvement of the existing regulations than as a novel piece of legislation. IV. Research Methodology The study in its entirety follows the Aristotelian principles, employing the four basic tools of reasoning: analysis, meaning the dividing of “the complex until the reaching of the simplest possible elements, the ones that cannot be divided further…” (Aristotelis, ‘Politica’ 1252a 18-20), in chapters 3-6, induction and production, mainly in chapter 7, and synthesis of the findings, in the conclusions. Also, due to its atypical nature as a multidisciplinary academic paper, the study employs various methods of methodology in order to reach the stated goals, which in total represent three different phases of collecting and analysing empirical evidence (Yin, 1994, p. 3): the ‘exploratory’ phase (to identify which the new regulations are), the ‘descriptive’ phase (what the regulations prescribe) and the ‘explanatory’ phase (legal interpretation and estimation of their further impact). For the ‘exploratory’ phase, the data being legal and thus restricted in certain formal sources, logically the method to be used is a non-critical review (equivalent to
  16. 16. Introduction 21 Yin ‘s ‘archival analysis’) of the official documents setting out the regulations. For the ‘descriptive’ phase2 , the method to be employed is a critical review of informal resources of legal reading, that is legal books and legal or managerial periodicals with reference to the issues concerned. The ‘explanatory’ phase consists of two parts: the legal analysis, which refers to the interpretation of the regulations, and the socio- economic analysis, which aims to assess the impact of the legislation to the parties concerned and the employment relations. IV. a. Legal analysis The legal analysis concentrates primarily on the interpretation of the Directives already presented (paragraph III.a supra), but also refers to UK legislation existing before the implementation of these Directives. During this analysis, three major methodological problems were encountered. Firstly, the fact that I was taught the Law in Greece, the legal system of which is based on Civil Law, influenced me to consider case law as a tool for reference and not as a set of rulings with universally binding features. However, it would be methodologically inappropriate to overlook the fact that, under Common Law, the case law in the UK plays a significantly more enhanced role, being a source of legislation equivalent to the statutes (Stamatis, 1991, p. 83). The solution which was found appropriate was to generally rely on the opinions expressed by British legal scientists, regarding the UK’s legal environment, and to accredit to British case law the specific gravity given by them at every instance. The second methodological problem encountered was in regard to the case law of the European Court of Justice and the manner in which it should be treated. The Court, according to Steiner and Woods (1998, p. 31), in developing the substantive law 2 The term ‘descriptive’ refers only to the chronic phase of selecting data, not to the way of presenting it in the text of this study, which effort has been made to be highly critical.
  17. 17. Introduction 22 “draws on principles and traditions from all the Member States. Since the EC Treaty is a framework Treaty the Court has been extremely influential in ‘filling the gaps’, and in doing so has created law (…)”, something which is apparent in several rulings on cases of Sex Discrimination (ibid)3 . The problem is that, in doing so, the Court is following its own way, which is similarly surprising for the scientists or judges of both legal systems: a court to create law is in principle unthinkable from the scope of view of Civil Law; at the same time, as Lord Diplock stated4 , the ECJ “applies teleological rather than historical methods (…), it seeks to give effect to what it conceives to be the spirit rather than the letter of the Treaties (…) [which] sometimes indeed, to an English judge, (…) may seem to the exclusion of the letter”. To overcome this problem, whenever appropriate, we will distinguish the interpreting Clauses from the law-making ones and we will read them with respect to their legal substance. The third methodological problem was the small quantity of available European case law on the basis of the new legislation, because of its novelty. Hence, the utilisation of European case law as a tool for validating the opinions expressed in published legal studies concerning the herein examined Directives will be limited. Nonetheless, whenever there exist rulings relevant to the subject of this study, they will be cited5 . All kinds of resources, formal, informal and juridical - the latter when available - will be examined from the point of view of analytical jurisprudence, as the doctrine was (re)defined by H.L.A. Hart in 1961: “The legal scientist perceives the Law as granted, enacted by the qualified State Authorities. […] The legal scientist keeps to a logical reconstruction of the meaning of the rules of definite law, as they apply, [the scientist being] distant of axiological thinking. This thinking is related to ideological positions of 3 That is even more obvious if we consider that, in most of the Directives examined in this study, it is mentioned as one of their purposes to come to terms with rulings of ECJ, when one would normally expect the reverse. 4 In R v Henn [1981] (cited in Steiner and Woods, ibid) 5 See also Appendix III
  18. 18. Introduction 23 subjective nature, however the exercise of the legal science has to be ideologically unprejudiced, in aim to be conditioned by scientific objectivity” (Stamatis, ibid, p. 92). IV. b. Socio-economic analysis For this part of the analysis (chapter 7, Impact Assessment) we will employ three different methods, each one where appropriate, which may provide credible data for each of the aspects investigated: - National and European Secondary Data: Use of secondary data resources providing figures about the employment in the UK and the EU, which will be used as tools for measuring the prospective impact of the new regulations, as well as previous research – particularly surveys – referring to the implementation of these regulations. - Literature review: Critical review of opinions expressed by specialists and researchers, forecasting the impact of the new regulations to the UK. - Scenario analysis. V. Structure In the main part of the study, we will firstly expound the Directives, analysing their content in terms of the legal meaning, effect and function, with particular interest to potential weaknesses, as well as to implications which may derive from their foreseen implementation (chapters 3-6). Secondly, we will point out ways by which these Directives may affect the employers and the employees, as well as the employment relations in the UK in general (chapter 7). Chapters 1 and 2 are a literature review over the legal context and the pending Directives, respectively. After the last chapter of the main part (7) we will draw the conclusions.
  19. 19. Introduction 24 REFERENCES Coopers and Lybrand Consulting, (1988) informative brochure: “Europe: The EEC Directives” Hart, H.L.A. (1961) The Concept of Law. Oxford: Oxford University Press Industrial Relations Services - Employment Trends issue 671: “Employment law update: what’s next from Brussels?”, January 1999 Industrial Relations Services - Employment Trends issue 679: “Towards a one-speed Europe?”, May 1999 Morris, P. E. (1989) “The Direct Effect of the Directives - Some Recent Developments in the European Court - part I”, Journal of Business Law, May 1989, pp. 233 - 245 Stamatis, C. (1995). The Foundation of Legal Reasoning: Introduction to Legal Methodology. Thessaloniki: Sakkoulas Steiner, J. and Woods, L. (1998). Textbook on EC Law. London: Blackstone Press Ltd Yin, R. (1994). Case Study Research. London: Sage publications
  20. 20. 25 CHAPTER 1 Literature Review Part I Presentation of The Context
  21. 21. Chapter 1 26 A. THE LEGISLATIVE BACKGROUND A.1 The Evolution of Labour Law in Western Europe From an article of Mark Jeffrey (1997, pp. 205-228) we can summarise the historic development of labour law in Western Europe as follows: In the geographical area of the European Union, historically, the accumulation of regulations in the areas of labour law and social security law was the result of a series of responses to perceived threats to the established social order. “Any benefits for the workers concerned were largely the means to the end being aimed at (that is, social stability), and not to the ends in themselves” (p. 206). Some workers in a relatively weak industrial position – especially women and children – were the subject of some of these laws, but the main focus remained on those workers who were perceived as the principal threat to the social order: mostly the unionised, skilled, male, manual workers in heavy industry – the ‘typical’ workers. Since the end was social stability, eventually the workers who were not perceived as a threat – the ‘atypical’ workers – were ignored or deliberately excluded by legislature, the exclusion being occasionally reinforced by the courts and, sometimes, by collective agreements. Throughout the countries which now constitute the European Union, the conception of ‘social rights’6 is relatively recent, as it was developed in the last few decades during which perceptions of law and rights, of work and of workers have all 6 Koukiadis (1985, p. 1-5) attributes the labour legislation to the need of protection of the weak part of the employment contract, the worker, against the potential peremptoriness of the strong part, the employer.
  22. 22. Literature Review: The Context 27 been changing. Factors which influenced this evolution were the vast increase in the volume of the legal and collective regulation of work, and parallel with this, the expectation that all workers should enjoy the same social rights. The sharp decline in heavy industry and the growth in services, which have greatly emphasised the importance of forms of work which do not correspond to the ‘typical’ stereotype, made the exclusions of workers from social legislation to seem unfair. Finally, the way in which women’s work is perceived has changed and is now widely accepted as it should not be undervalued, although this principle is still “far from having been translated into practice” (ibid, p. 206). A.2 The Evolution of European Labour Law within the EEC According to Bercusson (1996, p. 8) the national laws in the original six Member States were not conceived of in terms of the European Communities. However, the evolution of labour law and social law of the Community was inevitably influenced by the mature and maturing conceptualisations of the national labour laws of the original Member States and of later adherents (ibid, pp. 9-10, also Barnard and Deakin, 1998, p. 135). Conversely, as (E)EC labour law and social law norms developed, they began to influence the formulation and conceptualisation of national labour laws (ibid). Hence, the two processes are now linked in a specific symbiosis (ibid). In formulating (E)EC labour law, the law- and policy-making institutions of the EC had to come to terms with these systems and were influenced by them7 . 7 Bercusson provides a number of examples from different periods that, according to him, illustrate the historical continuity if this influence: “The insertion of Article 119 of the Treaty of Rome was due to the insistence of France , concerned to extend its own legislation on equal treatment on men and women. The Commission’s proposals beginning 1970s on workers’ participation in company structures owe their inspiration to the German law co-determination. The Thatcher government’s declared policy of labour law deregulation in Britain during the 1980s led to blockage of new EC social regulations during that decade. The Danish tradition of basing law primarily on collective agreements between the social partners (trade unions and employers’ associations) rather than legislation, and Italian emphasis
  23. 23. Chapter 1 28 A.2.a 1957-1973: The Market Approach of Labour Issues The Treaty of Paris in 1951 on the ECSC provided its authorities with powers to enable them to restructure the coal and steel industries. This included measures to deal with the social consequences for workers in this process, including retraining, relocation and housing (ibid). The Treaty of Rome on the European Economic Community, “much closer in spirit to the labour market policies of the Member States during the 1950s”, did not follow the precedent of the ECSC (ibid, pp. 12). The EEC was founded to create a common market in services, goods, capital and labour, having as cornerstone in the social field the free movement of workers (ibid). But, freedom of movement for labour in a common market as a founding objective is quite different from the objectives associated with national labour laws and also those of international labour standards. However, this primary association of EEC labour law with free movement provides the initial context of labour and social law of the Community in its earlier stages (ibid). Hence, the first fifteen years of the EEC (1957-1972) are usually identified as its neo-liberal phase, with emphasising solely on free movement of workers and labour mobility within the Common Market to the exclusion of other social policy initiatives (ibid). The return to concerns on workers’ rights and industrial democracy initiatives influenced EEC labour law only after the Paris Summit of 1972 and the Action Programme of 1974 (ibid, pp. 10). on the autonomy of the Social Partners, led to pressures allowing for EC labour law Directives to be implemented through collective agreements. Finally, the experience of constitutionalisation of social and economic rights in the new or revised constitutions of Greece, Spain, Portugal and the Netherlands contributed to the formulation of the Community Charter of fundamental Social Rights of Workers of December 1989” (1996, pp. 9-10).
  24. 24. Literature Review: The Context 29 A.2.b 1974-1980: The ‘Golden Era’ of European Labour Law This period has been characterised as the “golden era of Labour Law” in the EEC (Blanpain and Koukiadis, 1993, p. 60). The Action Programme, which was adopted by the Council of Ministers on 21 January 1974, had as priorities the achievement of total employment under better conditions, the improvement of living and working conditions, the harmonisation of national labour laws of the Member States, and the upgrading of the roles of labour and management in the planning and adoption of social policies, together with the upgrade of the role of the employees in the enterprise (ibid, pp. 61-62). During that period the Council of Ministers adopted the landmark Directives on equality between the sexes (equal pay, equal treatment, social security) and the Directives on collective dismissals, acquired rights upon transfer of undertakings and protection of workers in insolvency. A.2.c 1981 - 1991: The Interaction between UK Politics and EEC Social Concerns During the 1980s, the legislative process in the EEC in terms of Labour Law was held back as a result of the British government’s counteraction8 . As a result, the Community legislation was reduced only to health and safety issues. Thus, in the following years the activity of the Community in the social field was characterised by the conflict between the UK government, which was determined in blocking every policy at the social field which was not in terms with its ‘deregulation’ plans, and the attempts of the rest of the Member States and the EEC authorities to overcome the British opposition. For reasons of conciseness, we will not continue with the presentation of the issue, since it is discussed more extensively under section A.4. 8 According to all the sources reviewed
  25. 25. Chapter 1 30 A.2.d The Developments in Maastricht The Treaty on the European Union, signed by the Member States of the European Community on 7 February 1992, included a ‘Social Chapter’ in the form of the Protocol on Social Policy (No 14) and an Agreement (‘Social Policy Agreement’) annexed to the Protocol between all other Member States except the UK, also on Social Policy (Bercusson, ibid, p. 35). The Protocol noted that the Member States “wish to continue along the path laid down in the 1989 Social Charter [and] have adopted among themselves an Agreement to this end”, and formed an integral part of the EC Treaty. The Agreement was stated in the Protocol to be annexed to the Protocol and became, therefore, part of Community law (ibid). Similarly, any measures adopted using the institutions, procedures and mechanisms of the Treaty have had effects in Community law, as far as all Member States except the UK were concerned. The UK ‘opted out’ of the Social Chapter, the Agreement and the Treaty on the European Union (ibid, p.38), but the British social partners remained within the organisations of labour and management at EC level (ibid, p. 28). However, the exclusion was not considered to be permanent and alternatives for the UK to ‘opt in’ were provided (ibid). A.2.e The Treaty of Amsterdam According to Barnard and Deakin (1998, p. 133), “the most significant part of the Treaty of Amsterdam (…) regarding social policy was the introduction of a new Chapter on Employment”. According to Article 1 of the new Title in the Treaty, Member States and the Community shall “work towards developing a co-ordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change”. However, the protagonists remain the Member States: according to Article 3 the Community is to support and, if necessary, complement their action. On the other hand, Article 4 permits the Council to adopt certain labour market policies, albeit in the form of ‘soft law’, drawing up guidelines on employment (ibid). The Luxembourg European Council of 21 November 1997 decided to put the new Title on Employment into effect immediately in
  26. 26. Literature Review: The Context 31 order to implement the provisions on co-ordination of Member States’ employment policies from 1998. The co-ordination was based upon ‘employment guidelines’ drawn up by the Commission, this time structured around the four ‘pillars’ of employability, entrepreneurship, adaptability and equal opportunities (ibid). A.2.f An Overview: European Social Policy According to Barnard and Deakin (ibid), “the traditional model of social policy at national level encompasses social insurance, public assistance, health and welfare services and housing policy. Although both the EC Treaty and the Commission’s White Paper of 1994 talk of a Community ‘social policy’, most of these concerns are absent from the Commission’s concept of the term: in the place of the ‘traditional model’ there exist rules relating to sex equality in the workplace (but not yet racial equality), health and safety, and protection in the case of corporate restructuring. Therefore, the terminology of ‘social policy’ masks what is in essence employment related social policy – and an eclectic body of employment law at that” (ibid). A.3 The Evolution of British Labour Law At the dawn of the “one-speed” European Union, there are three main characteristics of British Labour Law, which distinguish it from the legal systems on employment that exist elsewhere in Europe: a singular relationship between collective bargaining and social legislation, a degraded role of collective bargaining, and, in general, minimal regulation of the employment relationship. The vicious circle, which resulted in the current situation, can be briefly described as follows:
  27. 27. Chapter 1 32 A.3.a Collective Laissez-faire From the beginning of the Industrial Revolution, legislation in the UK played a relatively limited role in directly regulating employment relations, and the greater importance traditionally was accorded to voluntary sources, of which collective bargaining has been the most important (Deakin and Morris, 1998, p. 15). In 1954, Kahn-Freund wrote that “there is, perhaps, no major country in the world in which the law has played a less significant role in the shaping of [labour-management relations] than in Great Britain” (ibid, p. 47). By this, according to the same authors, he meant that “not only was collective bargaining, and not legislation, the principal source of norms governing wages, working time and other terms and conditions of employment for most workers; but also that legislation played little or no role in determining the form which collective bargaining between labour and management should take”. Kahn-Freund described the result as ‘collective laissez-faire’. And, although in this system “the state was not absent, or neutral, still it retained for legislation the role of subsidiary to that of voluntary bargaining” (ibid, p. 16). A.3.b Deregulation and the “End of Trade-unionism” As a result, in the beginning of the 1980 ‘s, formal labour law regulation was comparatively weak in Britain, but extra-legal sources of regulation were correspondingly strong, as part of the legacy of collective laissez-faire (ibid, p. 45). The Conservative Administration of the years between 1979 and 1997 chose to adopt instead a programme of economic ‘deregulation’ and further liberalisation, “designed to promote product-market competition and reduce the size of the public sector” (ibid). Reform of industrial relations and restructuring of the labour market were central parts of this wider economic programme. Legislation limited and finally virtually abolished the ‘collective laissez-faire’, at the same time as statutory employment rights were qualified and in some instances removed completely, in favour of a return to the common law institution of the individual contract of employment (ibid). “What was perhaps most remarkable about this programme of reform was the use of labour law not
  28. 28. Literature Review: The Context 33 as a means of achieving distributive goals or embodying a notion of industrial - or social - justice, but as part of an economic policy designed to foster competitiveness” (ibid, p.39). Furthermore, on the grounds that it would promote labour market flexibility, within individual labour law a policy of partial or selective deregulation was adopted, removing legal protections even for the young workers and the low paid (ibid, p. 43). A.3.c The Role of Common Law On the other hand, Common Law, which was favoured as a source of labour law by the ‘deregulation’ process, had been traditionally sceptical of collectivism and simultaneously consistent in aiming to retain conditions of economic liberalism, thus reducing even more the employee protection in the workplace (similarly Deakin and Morris, ibid, p. 14). A.3.d The British Labour Law in the Context of the EEC A comparative study of the labour law in the ten EEC members of 1982 and Switzerland (Ellis and Storm, 19829 ) shows that, even at the time when the labour market in the UK was much more regulated than today, the employment conditions were still far below the standards in the other European countries - members of the EEC. Ever since, and while the labour market in Britain was following its individual route to deregulation, the other Member States were strengthening even more their social legislation. Hence, even if the EEC legislation represented the “lowest common denominator” among the other Member States, the UK regulations stood below it. 9 See pp. 117-140, 152-160, 186-206, 247-257, 293-302, 337-340, 383-389, 430-441, 491-511, 550-553 and 598-604.
  29. 29. Chapter 1 34 A.4 The Interaction Between the UK and the (E)EC Labour Law As already stated, the accession to the EC of the UK in 1973 coincided with the beginning of a period of legislative activity in the field of EC labour law, which according to Bercusson “has been so far unique” (ibid, p. 27). The impact of the five Directives on equality issues and acquired rights, all adopted during that period, on domestic labour and social law has been profound (ibid). The change of UK government in 1979 led to the adoption of an official attitude of fundamental hostility to the social dimension of the integration process (ibid) while, on the other hand, the trade union and labour movement reversed their previous hostility (ibid, p. 31). It is commonly accepted that, since 1979, EC legislative activity in the labour field has largely halted in the face of the UK government’s rejection of almost all proposals from the Commission, and their consequent failure to achieve the necessary unanimous approval in the Council of Ministers10 . According to Bercusson, “this UK veto was one of the reasons which led to the initiation of the policy of stimulating the European Social dialogue as an alternative path to a social dimension for the EC” (ibid, p. 28). During the 1980s, two more strategies were developed to maintain and continue Community Social policy and labour law (ibid, p. 65): “The first was the use of indirect financial instruments to promote social policy initiatives and to further labour law objectives, with the principal instrument the European Social Fund. The second involved amending the Treaty of Rome to allow for qualified majority voting on social policy issues”. This culminated in the Social European Act 1986, under which articles 100A and 118A were added to the Treaty of Rome, although in the text of the Act there was no direct reference to Labour Law (Blanpain and Koukiadis, ibid, p. 62). According to Bercusson, “the end result of the tension was manifest in the Community Charter of Fundamental Social Rights of Workers of 1989, which was signed by all the Member States with the exception of the UK” (ibid, p. 28). However, the Charter was no more than expression (‘declaration’ or 10 From all sources, also referred in Bercusson (ibid).
  30. 30. Literature Review: The Context 35 ‘reclamation’) of the political will of the signing parties, therefore it did not have any legal effects (Blanpain and Koukiadis, ibid, p. 63, also Barnard, 1996, pp. 61-3). As stated before, the UK opted-out of the Treaty on the EU, the SPA and the Social Chapter. However, a change of government in the UK On May 1997 led to a change of approach towards the Amsterdam Treaty negotiations (Barnard and Deakin, ibid, p. 133) and the UK agreed to opt-in to the Social Chapter. As a result, the SPA was merged with the Chapter on Social Policy (Articles 117-121) on the EC Treaty to form part of mainstream Community law. The force of the Directives already adopted under the SPA has been extended to the UK by the means of extension Directives under Article 100 EC. A.5 Transposition of (E)EC Labour Law into Domestic UK Law According to Bercusson, EC social and labour law can be incorporated in the UK by various ways and methods (ibid, p. 28). By the passing of primary legislation, through the House of Parliament, or by secondly legislation, through acts of the Administration: Section 2(2) of the European Communities Act 1972 gives power to the Ministers to make regulations. Thirdly, the UK courts have accepted the EC law doctrines of vertical direct effect (please see section B.2, infra) and that UK legislation must be interpreted in accordance with the requirements of Community Law. If such means do not secure the full and appropriate implementation of EC labour legislation, the Commission is able to pursue infringement proceedings under Article 169 of the Treaty of Rome. B. THE EU INSTITUTIONAL FRAMEWORK
  31. 31. Chapter 1 36 B.1 The Basic Institutions B.1.a The European Parliament (EP) According to Blanpain and Engels (1998, p. 42), the EP consists of 626 ‘representatives of the peoples of the States brought together in the Community’ (Art. 137 of the EC Treaty). Its members are elected by direct pan-European elections and their mandate lasts 5 years. The EP is a very special parliament, in that there is not a Government which has to rely on its confidence (ibid, p. 43). Also, for the EP to exercise a certain control over the Commission and to censure the Commission’s activities, a certain procedure has to be followed, which, according to Blanpain and Engels, “constitutes such a huge task that it has no real significance in practice”. The EP has a consultative and supervisory role, the latter being most important in regard to the budget, and its legislative role is slowly expanding. Its important powers in relation with employment law are in the cooperation and the conciliation procedure, which are discussed under section E (infra). Except where otherwise provided in the Treaty, the EP acts by an absolute majority of votes (ibid, p. 44). B.1.b The Council The Council of the European Communities, established by Article 1 of the Merger Treaty of 1965, is undoubtedly the most important European institution, since it is the principal European legislator (ibid, p. 44). According to Article 2 of that Treaty, the Council “consists of representatives of Member States. Each Government shall delegate to it one of its members.” Which member assists at a given meeting depends on the agenda (ibid). If the Social Council meets, the Ministers competent for these affairs, e.g. the Ministers of Employment will attend. The social council is one of the ‘sectorial’ or ‘specialised’ councils. If general points are on the agenda, the Ministers of Foreign Affairs will meet in the General Council. The European Council is the Council of Heads
  32. 32. Literature Review: The Context 37 of Governments and Prime Ministers, which meets three times a year together with the Ministers of Foreign Affairs. The Council is an institution of the Community. This means that, although national interests are defended in the Council and the Ministers defend the point of view of their respective Governments, Member States are bound to take all necessary measures to realise the objectives of the Communities (Article 5 of the EC Treaty). The most important tasks of the Council relating to Labour Law are (ibid, p. 45): - the organisation of free movement of workers (Art. 48-51 EC Treaty); - the approximation of (labour) laws (Art. 100-102 EC Treaty); - the elaboration of a social policy (Art. 117-122 EC Treaty); - the implementation of decisions regarding the Social Fund (Art. 125 EC Treaty); - the development of quality education and vocational training (Art. 126-127 EC Treaty); - the promotion of stronger economic and social cohesion (Art. 130A-E); - the implementation of the Social Charter and the Agreement on Social Policy. The Council acts by absolute majority, qualified majority or unanimity. Absolute majority is the general rule (Article 148(1) of the EC Treaty). In practice, however, the general rule is the exception and qualified majority is the rule (ibid). In regard to labour law, a qualified majority is needed for the following issues: - free movement of workers (Art. 49 EC Treaty); - the establishment of the internal market (Art. 100A EC Treaty); - the improvement of the working environment, health and safety of workers (Art. 118A EEC Treaty); - economic and social cohesion under the Art. 130E (EC Treaty); - the European Social Fund (Art. 125 EC Treaty); - the implementation of the Maastricht Agreement on Social Policy (partly).
  33. 33. Chapter 1 38 Unanimity is required for decisions regarding the rights and interests of employed persons (Art. 100A(2) EC Treaty) and for economic and social cohesion purposes under the Art. 130D (EC Treaty); B.1.c The Commission The Commission consists of 20 members “chosen on the grounds of their general competence and whose independence is beyond doubt” (Art. 157(1) EC Treaty). Smaller countries have one national as a member and larger countries have two. The Commissioners’ term of office is 5 years and is renewable (Art. 158 EC Treaty). The Commission acts by majority vote (11 votes). Under the Maastricht Treaty, the EP has a say in the appointment of the Commission. The Commission is, in contrast to the Council, European par excellence (ibid, p. 47): Art. 157(2) of the EC Treaty prescribes that “the members must, in the general interest of the Communities, be completely independent in the performance of their duties”. In principle, they may neither seek nor take instructions from any Government or from any other body and each Member State has the obligation not to influence the members of the Commission. Each Commissioner is accountable to the EP for all decisions taken by the Commission. Nevertheless, there is a division of labour, which takes place under the form of a distribution of portfolios: each Commissioner is thus competent for a number of directorates-general. This means, for example, that the Social Commissioner is responsible for “employment, industrial relations and social affairs, education and training”. Directorate-general V is for employment, industrial relations and social affairs. The most important task of the Commission is undoubtedly its participation on the ‘European legislative process’ (Art. 155 EC Treaty)11 . In quite a number of cases, the Treaties indicate that the Council can only act on a proposal of the Commission. The 11 Please see subchapter E, infra.
  34. 34. Literature Review: The Context 39 Council can only act with unanimity if it amends such a proposal, while the Commission is entitled to change its proposals, as long as the Council has not made a decision, either at its own initiative, or at the request of the Council itself, of the EP, or the Economic and Social Committee (ibid). Another important task of the Commission is to ensure that the provisions of the EC Treaty “and the measures taken by the institutions pursuant thereto are applied” (Art. 155 EC Treaty). If the Commission considers that a Member State has failed to fulfil an obligation under the Treaty may bring the matter to the ECJ (Art. 169 EC Treaty). It also has a decision-making power of its own and is competent to conduct negotiations that may lead to the conclusion of international agreements (ibid). B.1.d The European Court of Justice According to Art. 164 of the EC Treaty, the Court “ensures that in the interpretation and application of this Treaty the law is observed”. The Member States undertake to respect the competence of the Court regarding disputes concerning the interpretation or the application of the Treaty (Art. 219 EC Treaty). It consists of fifteen judges and is assisted by nine Advocates-General. The members of the Court are proposed by the Governments of the Member States and their six-year term of office is renewable. The Court is competent to judge whether Member States live up to their duties under the Treaties (Art. 169-170 EC Treaty), and to review the legality of the acts of the Council and the Commission and whether they need to be declared void (Art. 173-174 EC Treaty). The Court has also the jurisdiction to make preliminary rulings concerning the interpretation of Community law at the request of courts or judges of the Member States (Art. 177 EC Treaty). These rulings are binding for the national judges. The judgements of the ECJ are made in last resort and are consequently not susceptible to appeal. They are enforceable in all Member States of the Community. Natural and private persons also have access to the Court (ibid).
  35. 35. Chapter 1 40 In conformity with Art. 168A of the EC Treaty, a Court of First Instance was attached to the ECJ, in order to ease the case load of the latter. Its jurisdiction includes the disputes regarding the Communities and their staff, appeals by enterprises concerning ECSC levies, production quotas, prices and competition, and certain appeals relating to compensation concerning the points raised above. B.2 The ‘Social Partners’ The most significant changes introduces by the Social Chapter relate to the way that decisions are made and legislation is passed (Barnard, ibid, pp. 67-68). The Chapter envisaged a twin-track approach: on the one hand legislative, following the usual channels, subject to certain amendments to take account of the UK’s absence, and the other collective. This second approach permitted the substitution of Community legislation by an agreement between the Social Partners (usually referred as ‘management and labour’), reflecting an increased role for the Social Partners in the EU, and incorporating subsidiarity as regards the choice, at Union level, between the legislative and collective approach (Bercusson, 1994, ibid). The recognised ‘Social Partners’ in the EU are the European Trade Unions Confederation (ETUC), the Union of Industrial and Employers’ Confederations of Europe (UNICE) and the European Centre of Enterprises with Public Participation (CEEP). UEAPME, the organisation for small and medium sized enterprises, has unsuccessfully challenged its exclusion from the negotiations on parental leave before the Court of First Instance (Barnard and Deakin, 1998, p. 133)12 . C. THE MAIN SOURCES OF EU LABOUR LAW
  36. 36. Literature Review: The Context 41 C.1 Primary Sources of EU Labour Law: The Treaties The European Coal and Steel Community (Paris, 1951), the European Economic Community (Paris, 1951) and the European Atomic Energy Community or EURATOM (Rome, 1957), including their Annexes, Protocols and Conventions13 , constitute the founding Treaties of the European Community (Blanpain and Engels, ibid, p. 35, Barnard, ibid, p. 15) and the primary sources of Community Law. To these we should add their amendments through the Merger Treaty of 1967 (Paris), the Single European Act (1986), the Treaty on the European Union (Maastricht, 1991), and the latter development, the Treaty of Amsterdam (1997), with their respective supplements. Together, they form the backbone of the European Union, its “constitutional character”, and thus take precedence over any secondary or derived legislation which conflicts with their provisions (Barnard, ibid, p. 15). After the consolidation of the Treaties in Amsterdam, the Primary Sources of Labour Law are addressed in Articles 39-42 (previously, 48-51) on the Free Movement of Workers, in Art. 125-130 (pr. 109N – 109S) on Employment, and in Art. 136-150 (pr. 117-127) on Social Policy, Education, Vocational Training and Youth. C.2 The Directives as a Source of EU Labour Law The Directive is one of the three legally binding sources of secondary law, the other two being the Regulation and the Decision (please see next section, C.3). It is binding to the result to be achieved, upon each Member State to which is addressed, but leaves to the national authorities the choice of form and method (Art. 189 EC Treaty). Since it is only the result that counts, the implementation of a Directive can be done by all appropriate legislative means (Blanpain and Engels, ibid, p. 55). The intention of the 12 Case T-135/96, Judgement of 17 June 1998. 13 Which form an integral part of the Treaties, according to Article 239 EC
  37. 37. Chapter 1 42 Directives is to harmonise (though not make identical) the law in Member States. The employment related Directives are the main secondary source of EU employment law (ibid). The directives are produced after a long period of drafting by experts, exposure for comment, approval by EEC bodies, redrafting and re-exposure. Comments on the proposed directives may be made by individuals or representative bodies at many of these stages. To cater for difficulties encountered in individual states or by individual types of business (Coopers and Lybrand, 1980): - “In many cases, ‘derogations’ are permitted allowing a Member State not to legislate in accordance with particular terms of the directive but instead to enact alternative legislation normally to achieve the same objective in a different manner; - A ‘contact committee’ has been established whereby the Member States can, in a consultative capacity, review practical problems arising from the application of directives and advise the Commission on any supplements or amendments to be made to Directives”. Due to jurisprudence of the European Court of Justice in several cases, a question arose in terms of the direct effect of the Directives towards the national legal systems (Morris, 1988, p. 233). The issue is further discussed in subchapter E (infra). The Directives are Community law and not in themselves law directly applicable in the Member States. They take the form of binding instructions by the Council of Ministers to Member States, requiring them to enact law in accordance with the provisions of the Directives (Blanpain and Engels, ibid p. 55). Individual Member States’ governments are bound by the Treaty of Rome to comply with those instructions. However, they may not be considered law in national level before being transposed into national law by the national legislature (ibid).
  38. 38. Literature Review: The Context 43 C.2.a Common Principles Across the Employment Related Directives This paragraph is not aimed at presenting the general principles upon which the adoption of the Directives was based, but to cite principles which are common in the texts of the Directives to be presented in the main analysis. It purpose is only to help in not having to repeat remarks to be made upon the same issues. Subsidiarity and Proportionality The application of the principle of subsidiarity is an issue which has triggered a longstanding legal debate in the EU. However, the most important thing in the framework of this study is that the principle, found in the texts of all the Directives related to this topic, means that action is being taken at Community level only when the Member States cannot achieve a better regulatory result (Barnard, ibid p. 80). On the other hand, proportionality means that the measures taken are “the minimum required for the attachment of those objectives and [do] not go beyond what is necessary for the purpose” (from the Directive on fixed-term work, recital 16). Both principles have been set out by Article 5 of the Treaty of Rome (ibid). Another aspect of the principles is commonly met in their provisions on implementation (usually the last set of provisions), where the Directives declare that the Member States can maintain or introduce more favourable provisions than the ones the Directives set out, and that the measures the Directives provide do not prejudice the right of the Member States to introduce different measures as long the principles declared in the main text of the Directives are respected. Non Victimisation According to Lewis (1997, p. 69), victimisation means the harassment by legal or practical means “of people simply because they have given evidence in connection with proceedings, have brought proceedings or intend to do so against someone” under the provisions of the source of law in question. All of the Directives related to our topic deny victimisation.
  39. 39. Chapter 1 44 Non Regression This is another principle met in all the Directives to be examined. It deters the Member States from reducing the general level of protection afforded to workers in the field of the Directives. C.3 Other Secondary Sources The sources of secondary law are the Directives, the Regulations and the Decisions, which are legally binding, and the Recommendations and the Opinions, which are not binding (Blanpain and Engels, ibid , p. 55). C.3.a Regulations The Regulations have “general application”, are binding in their entirety and “directly applicable in all Member States” (Art. 189(2) EC Treaty). A regulation is clearly a generally binding norm, like an act of parliament (Blanpain and Engels, ibid, p. 55). It is immediately and directly binding without any specific intervention of the national authorities. Consequently, they supersede national law; national law which is contrary to a Regulations is null and void and may not be applied. Despite their undoubted direct applicability, their direct effectiveness is conditional (Barnard, ibid p. 31) (please see next subchapter, D). In the case of a regulation with direct effectiveness, the effect will be vertical and horizontal (ibid). C.3.b Decisions Like the Regulations, the Decisions are binding to their entity upon those to whom they are addressed (Art. 189 EC Treaty). The can be addressed to natural or legal
  40. 40. Literature Review: The Context 45 persons (Blanpain and Engels, ibid, p. 57). They are not general norms: they are directed to specific persons. Decisions which are addressed to the Member States can have direct effect. They are notified to those to whom they are addressed and take effect upon notification. D. HIERARCHY BETWEEN EU AND NATIONAL LAW D.1 The Question of Supremacy of EU Law In the early case of Costa v ENEL the ECJ established that, where national law conflicts with directly effective (please see paragraph D.2.b, infra) Community law, Community law prevails (Barnard, ibid, p. 27). According to a – not unchallenged – opinion expressed in Barnard (ibid, p. 28), on the basis of the judgement of the ECJ on Simmenthal, the doctrine of supremacy of the Community law applies irrespective of the nature of the Community provision (constitutive Treaty, Community Act or agreement with a non-Member State) or the national provision (Constitution, statute or subordinate legislation)14 ; it also applies irrespectively of whether the Community provision comes before, or after the national provision: in all cases the national provision must give way to Community law. 14 However, ‘Areios Pagos’, one of the two supreme Courts of Greece, in a recent judgement denied the application of the doctrine over the provisions of the Greek Constitution. Under the implications of such a ruling, the issue has to be investigated further.
  41. 41. Chapter 1 46 D.2 Applicability and Effect of EU Law It is not uncommon for the concepts of applicability and effect to be confused, even in the case law of the ECJ15 . According to Winter (cited in Barnard, ibid, p. 31), applicability connotes the quality of applying within the domestic legal system even in the absence of implementing legislation. Effect describes the quality of giving rise to the rights which an individual may rely on in a domestic court. A measure which is directly applicable is not necessarily directly effective. Another issue with importance for the needs of our analysis is in terms of the vertical and horizontal effect of a Community provision: vertical effect means the ability of a person to turn against a Member State (or the Community), relying on a right provided by the Community provision, while horizontal effect means the ability to turn against another person. It is accepted (ECJ rulings in Van Gend en Loos and Defrenne II ) that the provisions of the Treaty have both vertical and horizontal effect. D.2.a Direct Effect From a dissertation written by J. Fairhurst (1997, pp. 34-40) we are informed that the ECJ developed the principle of direct effect in Van Gend en Loos v Nederlandse Administratie der Belastingen [1963]. “In that decision, the Court creatively established that the Treaty may create rights which an individual may enforce directly in the courts of the Member States. […] However, in establishing the general principle of direct effect, the ECJ limited its scope only to those provisions which were sufficiently precise and unconditional. […] A Community provision is unconditional when it is not subject, in its implementation or effects, to any additional measures by either the Community Institutions or the Member States. In order to be sufficiently precise (or clear and 15 See Defrenne II, [1976] Case 43/75, where applicability is mentioned but effect is meant (Barnard, p. 31)
  42. 42. Literature Review: The Context 47 unambiguous) it is necessary to be able to identify the persons who are entitled the right, ascertain the content of that right, and identify the person/body liable to provide that right. […] In Francovich v the Republic of Italy it was made clear by the Court that the fact a Member State may have a number of possible options (or derogations) available to it when adopting or implementing legislation will not necessarily prevent the content of the measure from being adjudged to be sufficiently precise”. For the EC Treaty Articles and the Regulations to have direct effect the only conditions to be met are the ones described above. Also, their effect, once ascertained, is always horizontal and vertical. As for the Directives, an additional condition applies: the Directive in question not to have been transposed into national law within the time limit specified in its body, either not at all or not correctly (Pubblico Ministero v Ratti [1979]and Becker v Finanzamt Munster-Innerstadt [1982], cited in Barnard, ibid pp. 31- 32). Also, Directives can only have upward vertical effect (Marshall v Southampton Health Authority [1986] and Dori v Recreb [1994], ibid). Their effect does not depend on the capacity in which the State is acting, whether an employer or a public authority. D.2.b Indirect Effect The doctrine of indirect effect is of particular importance for the Directives. According to this doctrine, the national courts “in applying national law, whether the provisions on question were adopted before or after the Directive, the national Court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the Directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Art. 189 EC” (from Marleasing v La Commercial International de Alimentacion SA [1990], cited in Barnard, ibid, p. 37). Its most significant consequence is that it may offer an indirect way of achieving horizontal direct effects of the provisions of a Directive. According to Fairhurst, the British courts have been enthusiastic in applying the doctrine of indirect effect.
  43. 43. Chapter 1 48 E. THE LEGISLATIVE PROCESS ON LABOUR ISSUES IN THE EUROPEAN UNION There are four different routes by which European Commission proposals on employment issues can become law. The relevant process is determined by the Article of the EC Treaty on which the measure is based. IRSET (671, p. 8) summarises the possible legislative routes as follows: “The consultation procedure: Under this procedure, a proposal is submitted to the Council of Ministers by the European Commission. Following consultation of the European Parliament, and, in many cases, the Economic and Social Committee, the Council may adopt the proposal on a unanimous vote. The cooperation procedure: First, the Council adopts a “common position”, by qualified majority voting, which is then put forward to the European Parliament for a second reading. Then, the European Parliament either approves or takes no decision on the common position; either of these actions leads to the automatic adoption of the proposal by the Council. Alternatively, the Parliament can reject the proposal - in which case the Council can adopt it only on an unanimous vote - or it may propose amendments, which will lead to a new proposal by the Commission. Adoption by Council is by qualified majority voting. The co-decision procedure: The European Parliament has a right to veto proposals where a common position has been reached by the Council. This right was established by the Treaty of the European Union, which came into force on 1 November 1993. The Social dialogue procedure: The recognised “Social Partners” - management and labour representatives - can reach an agreement, under the social policy Protocol (protocol number 14) and Agreement (Social Chapter) annexed to the Treaty of European Union. The Commission is required to consult the partners on social legislation, as well as on the content of the measure, before a proposal is submitted.
  44. 44. Literature Review: The Context 49 The employers’ and Trade Unions’ representatives that comprise the social partners should forward an opinion or recommendation on the proposal to the Commission. If they wish to negotiate, they have nine months to reach agreement, though this may be extended by a joint decision of the Commission and the partners. Agreement resulting from this process can be implemented either “in accordance with the procedures and practices specific to management and labour and the Member States” or, where requested by the social partners, by a Council decision on a proposal by the Commission. The issue concerned determines whether the Council’s decision can be taken by qualified majority voting or only on a unanimous vote. Where the partners cannot reach agreement, or either side refuses to discuss the subject matter, then the Commission may submit a proposal to proceed under either the cooperation or consultation procedure. For example, following the refusal by the private sector employers to engage in negotiations, the European Commission has advanced its own proposal on national-level employee information and consultation”.
  45. 45. Chapter 1 50 REFERENCES Barnard, C. (1996) EC Employment Law. Chichester: Wiley Barnard, C. and Deakin, S. (1998) “European Community Social Law and Policy: Evolution or Regression?” in Towers. B. and Terry, M. (Eds) Industrial Relations Journal, European Annual Review 1997, pp. 131-137. Oxford: Blackwell Bercusson, B. (1994) “The Dynamic of European Labour Law after Maastricht” in Industrial Law Journal, 23(1) Bercusson, B. (1996) European Labour Law. London: Butterworths Blanpain, R. and Engels, C. (1998) European Labour Law Hague: Kluwer Blanpain, R. and Koukiadis, I. (1993) Community Law of Employment: Before and After Maastricht. Thessaloniki: Paratiritis Deakin, S. and Morris, P.E. (1998) Labour Law. London: Butterworths Ellis, Maarten and Storm, Paul (1982) Business Law in Europe. London: Kluwer Publications Jeffrey, M. (1998) “Not Really Going to Work? Of the Directive on Part-time Work, ‘Atypical’ Work and Attempts to Regulate It” in Industrial Law Journal 27(3) September 1998 (Oxford University Press). Lewis, David (1997) Essentials of Employment Law. London: Institute of Personnel and Development Morris, P. E. (1989) “The Direct Effect of the Directives - Some Recent Developments in the European Court - part I”, Journal of Business Law, May 1989, pp. 233 - 245
  46. 46. 51 CHAPTER 2 Literature Review Part II The Pending Directives
  47. 47. Chapter 2 52 A. PROBLEMS OF THE REVIEW Regarding the review of previous work, the most important problem was the low availability of books on British Labour Law with information valuable for the needs of the legal analysis of almost all the issues of this subject. The novelty of the regulations, because of which the review had to narrow and include only books written or updated after 1996, aggravated the problem. Almost all of the available books were examined (with the exception of Paul Lewis’ “Law of Employment” and Wallington’s “Employment Law Handbook”). Another problem was encountered also with the available editions of all of the books on EC employment law written by British scientists after the adoption of the first of the pending Directives (3/6/1996): the books of Brian Bercusson, of Catherine Barnard and of Davies et al. (eds.) were all published in 1996. The new, revised edition of Catherine Barnard’s book (1999) is at the time of writing still in press. The only nearly up to date book on European Employment Law, written in English and available from the beginning of the research, was the 1998 edition of Blanpain’s and Engels’ “European Labour Law”. The 1999 revised edition of this book was again not available at the time of writing, as well as Ellis’ “EC Sex Equality Law” (1998). Finally, the most important deficiency of this review is deemed to be the impossibility to read P. Davies’ article (1997) ‘Posted Workers: Single Market or Protection of National Labour Law Systems?’ (in Common Market Law Review 34, pp. 571-602). Similarly, there was a very limited quantity of up to date academic research on the topic, since only one academic year lies between the opt-in and the writing of this study. All the available resources in the libraries of the four Universities of Greater Manchester (University of Manchester, UMIST, Manchester Metropolitan University and University of Salford) have been reviewed, but none of them refers extensively to the Directives examined herein.
  48. 48. Literature Review: The Pending Directives 53 Nonetheless, we should mention once again the Dissertation submitted to the Law School of the University of Manchester by J. Fairhurst on May 1997 for the degree of MPhil in Law, with title “Enforcement of EC law in the UK with special reference to employment-related Community legislation”. The work of J. Fairhurst is concerned more with the general issues surrounding the implementation of EC Law, than Employment Law itself. The ‘employment-related Community legislation’ examined there are the Directives on European Works Councils and the Acquired rights Directive, and there is a reference to the consequence of the failure of the UK government to implement the Working Time Directive (before 1997). Since there is no overlap between the Directives examined in the study of Fairhurst and the present, we could argue that the two studies together cover almost all major issues concerning the implementation of recent EC Employment Law in the UK, the only exception being the Working Time Directive, as it was finally implemented in 1998. B. EXISTING ANALYSES REVIEWED The following paragraphs do not include all the sources reviewed but only the most important, since information was sought in numerous other resources (books in which it was thought as possible relevant information to be included, several articles in journals and other periodicals, etc.). The common characteristic in all the resources not cited below was either the lack of any information at all, or the existence of uncritical reviews of the legislation. As an example, IRSET refers to most or all of the Directives in several editions (e.g. 671, 678, 679) but there are no more than three references in our analysis, since the purpose of those presentations was more to inform than to examine closely. B.1 An Overview
  49. 49. Chapter 2 54 B.1.a Catherine Barnard (1996): EC Employment Law The book was written in 1996 and, apparently, is out of date for most of the issues concerned. Hence, in terms of our legal analysis, its content was valuable mainly for covering the background of the Directives and general issues concerning EC Labour Law, primarily the subject of equality between the sexes. However, there was enough material valuable for our assessment over the impact of the regulations. B.1.b Catherine Barnard and Tamara Hervey (1998): European Union Employment and Social Policy Survey 1996 and 1997 This article contains a review of the developments in the fields of Employment and Social Law during 1996 and 1997, including a critical review over the Treaty of Amsterdam itself, from the scope of Employment and Social law. The issues of our topic discussed in the article are the Agreements on parental leave and part-time work, and the Directive on the posting of workers. The important points for our legal analysis were again few. B.1.c Brian Bercusson (1996) European Labour Law What was said for Barnard’s book applies also for Bercusson’s book: there was not much – and in some issues, as parental leave, not at all – information useful for the legal analysis of the Directives, and most of the information was valuable only for covering the background of the Directives or more general issues. The only exception is the detailed legal analysis over the proposals of the Directive on the posting of workers, where most of the concerns expressed were applicable also to the Directive’s provisions (pp. 397-412). However, Bercusson is very critical in his presentation of the draft proposals, something that was proved valuable for our impact assessment.
  50. 50. Literature Review: The Pending Directives 55 B.1.d Roger Blanpain and Chris Engels (1998): European Labour Law - and – Roger Blanpain and Ioannis Koukiadis (1993): Community Law of Employment: before and after Maastricht These books are cited together because they are in fact two different versions of the same book: the former is Blanpain’s and Engel’s book in English, while the latter is its Greek version. The reason why they were both reviewed is because the Greek version has been adjusted to the Greek legal context by Professor Ioannis Koukiadis, and was thus helpful in providing material for comparison between the viewpoint of the UK and that of another Member State. However, as the Greek version was published in 1993, there was no information at all about the Directives of our topic. Surprisingly, the 1998 edition of the English version was even less useful for our legal analysis. The reason is that, although the book is up to date and includes all the Directives (apart, of course, from the latest one on fixed-term work), the presentation is a plain reproduction of their text. Not only was the presentation uncritical, it was also misleading in several points, since remarks regarding the previous legal regime have not been removed or even modified (i.e. the book, although ‘up to date’, is not actually ‘updated’). As an example, the section referred on the burden of proof in cases of discrimination based on sex (p. 285) starts with a paragraph stating that “regarding proof of discrimination, it is business as usual: the appellant must prove his or her point” (emphasis added), and continues with the presentation of the issue as it was ruled before the adoption of the Directive. The reader is only informed that it is not any more ‘business as usual’ after proceeding to the next paragraph, which, as stated, reproduces uncritically the text of the Directive. Similar points are very common also in the presentation of the general issues regarding Community law, where again all the aspects regarding the Treaty of Amsterdam are cited in one place without any modification of the rest of the text.
  51. 51. Chapter 2 56 B.1.e Mark Jeffrey (1998): Not Really Going to Work? Of the Directive on Part-time Work, ‘Atypical Work’ and Attempts to Regulate it This article by Mark Jeffrey was the most influential and, thus, the most valuable reading of this study, not only for the issues it covers, but also for the rest of our legal analysis. What makes it so important is the pattern of legal analysis that Jeffrey employs, which became adopted throughout our study: a word by word examination of the provisions, aiming to find potential loopholes, derogations and limitations. The findings are then juxtaposed with the stated objectives of the Directive, aiming to estimate its overall contribution in resolving the issues it touches. Our legal analysis of the Directive on part-time work relies heavily on the article. B.2. Burden of Proof in Cases of Discrimination Based on Sex More specifically, regarding the burden of proof, in pages 186-188, Barnard cites and analyses the rulings on Enderby and Danfoss, and indicates their link with certain provisions of the Directive’s last proposal. Also, in the (supplemental) update to chapter 4 (pp. 503-5), she cites the ruling on Dansk Industry and refers to the failure of the Belgian Presidency in terms of the proposal’s adoption by the Council, as well as the latest (to date) plans of the Commission. B.3 Parental Leave Again in Barnard, issues related to the Directive on parental leave are covered initially in page 110: the author gives some information of the entitlement as mandatory in other Member States and refers generally to the late proposal of the Commission and the UK’s blockage. However, both the Directive and the Agreement, as finally adopted, are commented in the ‘chapter update’ of pages 513-520. The presentation is more a
  52. 52. Literature Review: The Pending Directives 57 reproduction of the context of the Agreement than a critical review, thus it was again not valuable for our analysis. Also, the author provides some comparative data about the entitlement in the Member States. The presentation of the subject in Barnard and Hervey is very concise and thus indifferent for our legal analysis. However, some concerns over the implementation of the Agreement have been taken under consideration in chapter 7. B.4 Atypical Work Regarding atypical work, Barnard provides firstly some statistical data in terms of atypical workers in the EU, and then comments on the proposals of 1990, as well as the adopted in 1991 Directive on health and safety. Again, there is nothing important so far for the needs of our legal analysis, the only exception being the contribution in the ascertaining of the fact that there is a great distance between those proposals and the Framework Agreement. In the chapter on equal pay, the author cites the ruling on Jenkins and Rinner Kuhn, the results of Wilbrink in terms of the principle of pro rata temporis, the aspects of Enderby concerning the legislative sources of discrimination, as well as Danfoss. All of the remarks made on these cases were taken into account in our scenario analysis, under the chapter on impact assessment (chapter 7). Also, the presentation of the British government’s arguments against the proposals (pages 340- 341) made possible the confrontation of the assessment made by the Conservative to the assessment made by the Labour administration, which is included in the same chapter. Some more statistical evidence, together with opinions on the impact if the proposals, which are included in the update of pages 541-543, which are also considered in our assessment of the regulations’ impact. In Barnard and Hervey, the review of the Agreement on part-time work is again concise and uncritical, but there is an extensive presentation of case law developments on the issue under the previous status. The judgements cited are those on the cases of Lewark, Frees and Speckmann, Boetel, Helmig and others, Gerster, Kording, and Hill

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